Israel Corporation (TASE: ILCO) today announced that wholly-owned subsidiary Zim Integrated Shipping Services Ltd. yesterday signed an agreement with a shipyard, with immediate effect, to cancel contracts for the purchase of five of the nine ships ordered in 2007-08. The ships were originally due to be delivered in 2012, but due to the 2008 global economic crisis, delivery was postponed until 2015.
The shipyard will refund Zim $30 million from the down payment on the ships, while the other $55 million will be a cancellation fee. Delivery of the four other ships has been postponed from 2015 to 2016.
Israel Corp. added that Zim will recognize a reduction in value of $133 million in its financial report, as a result of the agreement.
In its financial report for the third quarter of 2012, Israel Corp. stated that Zim posted a net profit of $16 million in, compared with a net loss of $66 million for the corresponding quarter of 2011. Zim increased its cash flow from operations to $102 million for the third quarter from $23 million for the corresponding quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on March 19, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013